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Car companies say chip crisis easing as growth slows

The global semiconductor shortage that’s bogged down the auto industry for almost two years is showing signs of easing, at least for now.
Mercedes-Benz, Daimler Truck Holding, and BMW are among carmakers now getting enough of the hightech components to produce at full capacity after experiencing crippling outages for months. The breakthrough comes earlier than the companies predicted and marks abright spot for an industry facing a deteriorating economy and inflation while managing a historic transition to electric-vehicle production. Manufacturers are cheering the chip-supply improvement but aren’t declaring victory yet.
“We’re still monitoring it week to week, but up to now basically worldwide, we had no issues running production,” said Joerg Burzer, Mercedes’s head of production and supply chain management. Supply issues occur “here and there”, he said, “but nothing compared to what it was like last year”.
Even as demand for cars boomed, auto manufacturers have had to curtail output as plants globally couldn’t source enough chips critical for increasingly computerised vehicles. The outages have been so severe that global passenger car output has barely shown signs of recovery to pre-pandemic levels.
Some of the new availability of chips stems from the weakening economic outlook and inflation, which has cut into demand for consumer electronics that also use the components. Karin Radstrom, head of the Daimler Truck’s Mercedes brand, said the company is now getting the chips it needs to work down a backlog of orders. “It’s not perfect, but it’s better than last year,” Radstrom said.
BMW expressed similar reserved optimism, saying plants are up and running and the company isn’t experiencing any stoppages due to chip supplies. Volkswagen, which like others estimated that the logjam would begin to ease in the second half of 2022, is also seeing steady supplies.

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